'No chance' on making Duke absorb coal ash costs, North Carolina GOP says
The North Carolina legislature on Thursday filed a bill that would prohibit Duke Energy from recovering the costs of coal ash clean up from ratepayers.
House Bill 567 follows a ruling last week by the state's Department of Environmental Quality (DEQ) that will require the utility to completely excavate all its coal ash ponds. Duke estimates full excavation will add $4-5 billion to its already $5.6 billion cleanup.
The bill only has Democratic sponsors thus far and faces a Republican majority in the House. "It has no chance of passing the North Carolina legislature," Rep. Chuck McGrady, R, who was the primary sponsor on the legislation that led to the DEQ's excavation order, told Utility Dive.
States and utilities across the Southeast are beginning to view full excavation as the only solution to decades of leaking coal ash ponds. But once excavation is ordered, the question of who pays for it becomes the focus.
For Dominion Energy, which was ordered by Virginia to fully excavate its ponds earlier this year, costs were the focus of a series of op-eds in the Washington Post. One argued it is the company's responsibility to absorb "the cleanup costs from which they profited" and another responded "ratepayers foot the bill because the company was not breaking the law by storing the coal ash as it did."
A similar argument is happening in the legislature and among constituents in North Carolina.
Duke pled guilty to nine criminal violations of the Clean Water Act for its management of coal ash in 2015, following the Dan River Spill, and the burden of continued mistakes should not fall on ratepayers, Rep. Joe Sam Queen, D, one of the primary sponsors on the bill, told Utility Dive.
"Duke needs to be accountable for their own pollution," he said. "This is not a new thing. Before the Dan River spill, they were well aware of the risks they were taking."
The Dan River spill led to the release of approximately 39,000 tons of ash and 27 million gallons of water polluted by toxic metals into the nearby Dan River. That spill led to the Coal Ash Management Act, which was amended in 2016 to direct the DEQ to evaluate Duke's ash ponds and determine the next best steps forward.
That bill became law through bipartisan support, said McGrady, one of the primary sponsors on the legislation. But putting the costs back onto the utility will not receive the same backing needed to pass through the majority Republican legislature, he said. And it doesn't have his support either.
Ratepayers likely benefited from Duke Energy's decisions to store coal ash cheaply, "stockpiled in basins," he said.
"That was a benefit to the ratepayers to the extent that they didn't have to pay for the cleanup costs on the front end, which they could have," he said.
Duke and Dominion have estimated billions in costs for total excavation, although Dominion saw its cost estimates fall from an initial $2.6-6.5 billion, to approximately $2.8-3.4 billion, if one bidder recycled 45% of its ash over 15 years. Queen said he would not be surprised if a similar thing happened with Duke.
"Duke has a track record with hyperbole on cost," he said. "It's going to cost some money, but whether it's what they say it is, is another question."
Duke's rates will be set by the state's Public Utilities Commission, based on a review of operational and regulatory compliance costs, Paige Sheehan, director of policy and environmental communications at Duke Energy told Utility Dive in an email, adding the utility won't comment further on pending legislation.
If Duke were to be found negligent in the way it's handled its coal ash since the spill, the commission will make that call, said McGrady, noting that they did exactly that in Rockingham County, North Carolina, when it was found the utility's negligence caused the spill.
"I think it's gotta be done on a case by case basis," he said. "I think just across the board saying all the cleanup costs are Duke Energy's to bear is not the appropriate approach."
If the Republican super majority in the General Assembly doesn't want the bill to "see the light of day" they will likely just kill it in committee, said Queen.
"They probably will not vote it down," he said "I don't think they want to be on the record of saying 'No, let the taxpayer pay for Duke's mistake."
But, he noted, while the bill may not have full legislative support, it does have public support.
"It needs to be articulated and people need to know there is an option that's on the table," he said.
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